AI is turning energy into the hottest business in America

Driving the news: Electricity — long treated as a cheap, abundant commodity — is suddenly emerging as one of the most valuable strategic assets in business.

• "Everyone to some extent is either dependent on energy as a core input or they see energy as a huge opportunity," said Brian Janous, who was Microsoft's first energy hire 15 years ago and is now co-founder of data center developer Cloverleaf Infrastructure.

The latest: Ford unveiled earlier this month its expansion into energy storage for data centers and other large power users.

• It launched a new subsidiary called Ford Energy in response to what it calls "the massive demand for domestic energy storage."

Follow the money: Investors are increasingly rewarding companies pivoting to — or doubling down on — the power behind the AI boom. A few recent highlights:

• Ford's stock price rose to its highest level in three years after its rollout of the $2 billion energy business.
• Bloom Energy, long seen as a niche energy player whose tech can deliver on-site power fast, saw its stock price skyrocket more than 1,200% over the past year.
• Fervo Energy, a geothermal startup once viewed as speculative climate tech, surged after going public earlier this month as Wall Street hunts for new electricity sources to feed data centers.
• GE Vernova booked $2.4 billion in electric equipment orders for data centers in the first quarter alone, more than it made all of last year in equivalent sales. Its stock has gone up about 60% this year.

"The energy behind the [artificial] intelligence is invisible to most people, but it's enormous," said Andy Power, president and CEO of Digital Realty, one of the world's largest and most established data center companies.

• "But this isn't new for those of us who've been building digital infrastructure for more than 20 years," Power said in a statement to Axios. "What's new is the pace. Utilities are inundated with applications for power and doing triage on who's real."

Reality check: Beneath the surging stock prices, trouble is mounting. Opposition to data centers is intensifying rapidly, and some of the biggest projects may never come to fruition.

• "A lot of people are going to lose a lot of money in this space," Janous said — not because of a lack of demand, but because so many mega projects are chasing that demand.

• He pointed to a troubled project in Texas that bills itself as the largest data center proposal in the world and another proposal in Utah by celebrity investor Kevin O'Leary.

Friction point: The number of data centers canceled after pushback reached a record high in the first quarter of this year, according to data by Heatmap Pro.

• The canceled projects accounted for more than $40 billion in investment, the analysis found.
• "It's getting a lot worse," Janous said about the opposition, sounding far more negative than he did in an Axios interview from February. He cited community concerns about water use, air pollution and noise as top worries.

Between the lines: Every gold rush creates problems — and new businesses. The AI power boom is now spawning a generation of startups building products for data centers, some of which could help address community concerns.

How it works: Microsoft, Google, Amazon and Meta are teaming up with nonprofit investor Elemental Impact to accelerate new technologies using data centers as test cases.

• Those technologies include advanced cooling, energy storage and low-carbon building materials.

What we're watching: If these startups scale, some could help address concerns surrounding data centers, particularly around water use and air pollution.

The bottom line: For decades, energy was an input. In the AI era, it's becoming the product.